Last week, the Illinois General Assembly (IGA) passed SB16, a measure that establishes a "fast track" expedited foreclosure process to help address the issue of abandoned residential properties in Illinois.

After nearly two years of negotiations, the Illinois Credit Union League (ICUL) played a key role in advancing this critical legislation. SB 16 cleared both chambers during the second week of the IGA’s "veto" session, passing the Illinois House on December 4, 2012 by a vote of 87-17 and the Illinois Senate on December 5, 2012 by a vote of 47-0. The bill, which will now be sent to Illinois Governor Pat Quinn for his signature, carefully balances the interests of consumers, lenders and local governments and provides a meaningful solution regarding the social issue of abandoned properties.

Key elements of SB16 include:

Establishment of a "fast track" expedited foreclosure process. The fast track concept has been of paramount focus and a fundamental priority for ICUL. The league’s approach has been to work with sponsors in an attempt to “fine-tune” the mortgage foreclosure process to make it more efficient and expedient, and avoid provisions that penalize lenders (and, ultimately borrowers) through increased fines and penalties. SB 16 has accomplished these goals by allowing lenders to shorten the foreclosure process for abandoned properties by approximately 18 months. As a result, lenders will obtain title to these properties more quickly and then assume responsibility under applicable ordinances to maintain and secure them, which will be good for neighbors, neighborhoods, and local governments. Lenders will benefit, too, because they will acquire properties that have suffered less damage and deterioration and can be sold for much more, and they will also save 18 months of costs like property taxes, insurance, and loan servicing fees. The negotiated language includes a better and more efficient foreclosure process for lenders and good protections for consumers.

Funding for remediation of abandoned property as well as pre-foreclosure counseling. The bill includes an additional residential foreclosure filing fee to provide support for local governments and struggling homeowners. Institutions that have filed 175 or more foreclosures during the preceding calendar year will pay a $500 fee, those that filed 50-174 foreclosures will pay a $250 fee, and institutions that filed less than 50 foreclosures will pay a $50 fee. The vast majority of community banks and credit unions will pay the $50 fee. These fees are expected to generate approximately $41 million, with $28 million going towards abandoned property clean-up and the remainder for housing counseling for homeowners. The fees will be remitted by the court clerks to the State Treasurer. The Illinois Housing Development Authority will then draw upon the funds to make grants to local communities and housing counseling agencies throughout the state.

Bankruptcy relief provision. In addition to the fast track and funding provisions, SB16 contains language that clarifies that a portion of the Conveyances Act is permissive, not mandatory, so it cannot be used to affect the validity or priority of a properly recorded mortgage by a trustee in bankruptcy. This provides a tremendous benefit to every Illinois credit union by protecting against the avoidance of mortgage liens in bankruptcy proceedings.

Additional provisions of the bill clarify the method of delivering foreclosure notices to municipalities, and also require delivery of the notices to Chicago aldermen. The measure also directs lenders to notify the insurance company for the property, after confirmation of the property’s sale. Further, the bill protects lenders and their agents from criminal and civil liability when entering, securing or maintaining abandoned residential property.

The topic of foreclosure has been an overarching focus during the 2011 and 2012 spring sessions of the IGA. Although it has been widely acknowledged by lawmakers that credit unions were not the cause of the crisis, numerous measures were introduced to address this issue. SB16 represents an excellent compromise solution which will not only benefit credit unions but also the citizens of Illinois.

"SB 16 received the support of the Illinois Attorney General, the Speaker of the House, and both chambers of the Illinois General Assembly," said Stephen R. Olson, ICUL executive vice president and general counsel. "Throughout the process, the excellent reputation and respect credit unions have earned with legislators were very apparent. The support of Illinois credit unions played a key part in helping to pass this critical measure."

The Foundation also awarded seven Community Service Grants at $500 each. This program is designed to encourage and reward chapter or credit union participation in local community projects. Credit unions and chapters can qualify for grants by hosting an established event, creating an event, or volunteering at an established event. Recipients included: DHCU Community Credit Union (Moline), Landmark Credit Union (Danville), Midwest America Federal Credit Union (Danville), and North Side Community Federal Credit Union (Chicago). Three chapters -- Danville Area, Egyptian, and Southern Illinois -- also received this grant. Grants awarded will go toward several projects, including North Side Community’s effort with a local social service agency to teach people how to prepare healthy meals on a limited budget and stretch their food budget. These workshops will be open to the community.

In addition, five credit unions received Marketing and Business Development grants that totaled $15,865. The recipients were: Elite Community Credit Union (Bourbonnais), IBEW Local 146 Credit Union (Decatur), Jeff-Co Schools Federal Credit Union (Mt. Vernon), Peoria Hiway Credit Union (Peoria), and SDC Employees Credit Union (Kankakee). Established in 2006, these grants help credit unions with assets of up to $30 million to start or expand outreach efforts. The maximum grant award is $5,000 per credit union per year. Grant requests this round were for membership outreach efforts.

Lastly, three credit unions were recipients of Financial Independence & Revitalization Effort (FIRE) grants. They included: Members First Community Credit Union (Quincy), North Side Community Federal Credit Union (Chicago), and South Division Credit Union (Evergreen Park). The purpose of the FIRE Program is to provide assistance to credit unions to expand their ability to build and maintain viable communities by providing credit and financial services to residents and businesses in low-income and underserved areas of Illinois. Members First will be using its grant to expand its reach in the number of junior high and high schools and students in four counties with the Banzai financial education program.

Established in 1978 to foster credit union ideals and philosophy throughout Illinois, the Foundation has awarded more than $2.3 million in scholarships, community service grants, assistance for small credit union development, emergencies and natural disasters, limited income credit unions, and community involvement projects. Including the current round of grants and scholarships, the Foundation in 2012 awarded $56,033 in SCUD grants, $8,750 in community service grants, $45,865 in marketing and business development grants, and $14,700 in Financial Independence and Revitalization Effort (FIRE) grants. Earlier this year, nearly $45,000 in scholarships were also awarded.

UIECU, in partnership with the University of Illinois Alumni Association, offers the Official Credit Card of the University of Illinois, featuring campus logos and images from the Urbana-Champaign, Chicago, and Springfield campuses. With 3,452 new accounts opened in 2011, UIECU surpassed the second place issuer in new accounts by more than 10 percent.

The partnership benefits the Alumni Association through royalties based on credit card purchase transactions and is marketed to U of I alumni, fans, and existing UIECU members. Current U of I students are specifically excluded from marketing by mutual agreement.

“We’re very pleased with our partnership with the credit union and the acceptance of this credit card offer by our alumni and fans,” commented Loren Taylor, Alumni Association President and CEO. UIECU President E.J. Donaghey added, “The credit card program has led to new accounts, new members joining the credit union, and new opportunities to serve the U of I overall. The program’s success to date has exceeded all of our projections.”

UIECU was awarded this contract effective July 1, 2010, replacing a long-term relationship between the Alumni Association and Bank of America. In addition to the university images on the cards, the program features low introductory rates, a rewards option, and no or low fees in comparison to typical credit cards.

Purdue FCU, working with the Purdue Alumni Association was in the No. 3 spot, with 2,877 new accounts in 2011, compared with 2,642 accounts in 2010, when it ranked No. 1.

The third credit union in the top 10--at the No. 5 spot--was Michigan State University FCU, working with Michigan State University. It opened 1,115 new accounts in 2011, compared with 302 in 2010, when it ranked 24th on the list.

Rounding out the top 10 list were:

Barclays Bank Delaware (working with the Harvard Alumni Association);

FIA Card Services, N.A., which had four spots on the list for its programs at University of Notre Dame, Auburn Spirit Foundation, Alumni Association of the University of Michigan and Phi Theta Kappa International Honor Society;

Capital One, N.A., working with Georgia Tech Alumni Association; and

USAA Savings Bank, working with the Association of Graduates of the U.S. Air Force Academy.

The 10 agreements account for roughly 35 percent of all new college credit cards opened last year. They opened a total of 15,041 new accounts, compared with 9,065 accounts in 2010.

In the past year, the percentage who said they would spend more than last year rose from 8 to 12, and the percentage who said they would spend less declined from 41 to 38. These differences are statistically significant.

In both years, the survey questions were developed by CFA and CUNA and were administered to a representative sample of adult Americans by ORC International in early November (9-13 this year). This year, 660 persons were interviewed by landline and 352 by cell phone.

"Our survey results suggest that holiday spending this year will likely rise by between 3.5% and 4% compared to last year," said Bill Hampel, Chief Economist for the Credit Union National Association. "This represents the fourth year of gradual improvement in holiday spending plans since a sharp decline in such plans in 2008."

The intention of consumers to increase holiday spending from last year is consistent with, and may well reflect, perceived improvement in their financial situation. From 2011 to 2012, the percentage who said their financial situation was better than a year ago rose from 19 to 24, and the percentage who said it was worse fell from 37 to 33.

Again, the change is statistically significant.

Despite the rise of student debt and continued concern about mortgage debt, the percentage of those who said they were concerned about meeting monthly debt payments fell from 45 to 43 percent. And those who said they were unconcerned rose marginally from 38 to 39 percent. One factor here might be the increasing percentage - 19 to 24 percent in the past year- who said they did not have any credit card payments.

Yet, things are still financially tight for many families. When asked if they had extra funds (not including lines of credit) available to pay for an unexpected expense of $1,000, only 49 percent said that they did. This lack of emergency savings may help explain why an increasing percentage -- 38 to 43 over the past year -- said that, if they received an unexpected windfall of $5,000, they would use most of it to add to savings or investments.

There have been many studies and press reports on huge income and wealth gaps between high- and low-income families. But there has been little focus on whether these gaps have increased over the past year. The 2011 and 2012 surveys suggest that they have.

Whether respondents reported they would increase or decrease holiday spending from last year was related to income. Among those with incomes under $25,000, 11 percent said they would spend more while 44 percent said they would spend less. Among those with incomes over $100,000, 18 percent said they would spend more while 31 percent would spend less.

These income-related differences in spending plans may well reflect perceptions about one's financial situation. Among the low-income group, only 21 percent said this situation was better than last year while 45 percent said it was worse. Among the upper-income group, 30 percent said their financial situation was better while only 23 percent said it was worse.

The linkage between holiday spending plans and perceived financial situation was made even clearer by correlating the two variables. Among those who said their situation had improved, 31 percent were planning to spend more than last year while only 19 percent were planning to spend less. But among those who said their situation had worsened, only 2 percent were planning to spend more than last year while 66 percent were planning to spend less.

"It is unfortunate that families with the lowest incomes are more likely than high-income families to think their financial situation has deteriorated over the past year, so are more likely to cut back holiday spending," said CFA Executive Director Stephen Brobeck.

Even though fewer lower-income than upper-income families carry consumer and mortgage debt, a far higher percentage of the former than the latter expressed concern about this debt -- 51 vs. 28 percent. In part, this may reflect the fact that only 19 percent of the lower-income, but 82 percent of the upper-income, respondents said they had extra funds to cover a $1,000 unexpected expense.

Up to two individuals from the categories described below are eligible to receive this prestigious award. Each credit union or chapter is entitled to submit one nomination annually. The Lifetime Achievement category recognized the special efforts put forth by credit union and chapter volunteers. It complements the Hall of Fame Leadership Award, which recognizes contributions made on behalf of the credit union movement through statewide or national endeavors.The League Board Annual Convention Committee will select up to five nominees from each category. Those nominations will be sent to three out of state judges to determine the final selection. Inductees will be chosen based on an objective point system and the nominee profile submitted with the application. Those selected for membership in the Hall of Fame will be inducted during the Keynote & Awards program held in conjunction with next year's League Annual Convention.

To enable as many credit unions as possible to participate, the ICU Foundation will cover the cost of the webinars, test sites and in-person training. There will also beseveral locations for the proctored tests that are part of the program.

FiCEP, CUNA’s Financial Counseling Certification self-study program, enables all credit union staff to become more confident in helping members build a stronger financial future. FiCEP is designed for credit union staff who work in the financial counseling, collections, and loan departments, or any other staff members who are committed to helping members gain control of their financial future.

Modeled after the CUNA Certified Financial Counselor Schools, FiCEP includes two parts of four learning modules each. When participants successfully complete the proctored exams for both parts (eight total modules), they become a Credit Union Certified Financial Counselor ready and able to assist your members reach their financial goals.

In addition to the self-study education materials, the "enhanced" program includes 10 webinars -- 1 per module plus an orientation session to kick-off for the course and a session dedicated to implementing financial counseling at your credit union -- two proctored exam sessions plus one in-person meeting to help participants learn how to use their new skills at work.

The webinars will take place every two weeks. The webinars will be recorded and available for participants who cannot attend the live session. The proctored testing sessions will be held following the first and second sets of four modules in several locations throughout the state. The in-person meeting will be held in Naperville and includes lunch.

The benefits of FiCEP for credit unions include:

Proven financial counseling skills become a part of your credit union's culture;

Written for all staff so anyone can offer financial counseling during every member interaction;

Certification satisfies members’ needs as they continually look for the value of your credit union;

Helps members transform the way they deal with money through real-world counseling.

The ICU Foundation Board of Directors has generously agreed to cover the cost of the REAL Solutions enhancement which had been shared among the participants last year, so the only cost to your credit union is the purchase of the FiCEP books and exams from CUNA. We have secured a discount on the materials this year and are passing the savings on to you!

Most participants will need to purchase the FiCEP self-study books and the certification exams. See the chart below for the cost per participant which includes the FiCEP self-study books and exams. CUs who purchased the FiCEP self-study books from CUNA since 2011 can reuse them by new staff members who enroll in the program. The cost is $240 for this option and includes the FiCEP exams. In addition, scholarships are available from the ICU Foundation for this program.

We, as the financial support system of credit unions, are committed to the "people helping people" concept of credit unions as cooperative financial institutions. Our purpose is to provide credit unions with a favorable operating environment and quality information, products and services which have value, and which enable credit unions to exist, compete and prosper in the financial marketplace.